Roofing 101: Common Legal Issues and Concerns
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Under Florida law, a roofer must have a license to perform work in Florida. Roofers (or “roofing contractors”) are classified as Division II Contractors under section 489.105(3), Florida Statutes. Roofing contractors must hold one of two distinct types of licenses. A roofer may obtain a license as a “certified contractor,” whereby that roofer is permitted to operate in all Florida cities and counties. A “certified contractor” license is advantageous for larger companies that operate across jurisdictions, since this license exempts roofers from having to obtain local competency licenses.
Getting Up and Running
Acquiring and maintaining a certified contractor’s license can be burdensome, however, since Florida Statutes require certified contractors to participate in continuing education programs. Roofing contractors, who primarily operate locally or regionally in Florida, may obtain a “registered contractors.” Registered roofing contractors need only obtain a “certificate of competency” from the local authority in its jurisdiction.
Dealing with Customers
One of the hardest parts of owning any business is establishing and keeping a good reputation across a broad range of customers. With that said, construction projects don’t always go according to plan. For this reason, roofing contractors must be aware of certain key contract issues.
- Have a written contract. First and foremost, roofers should always reduce their agreements to writing. It is much easier to enforce the terms of a written contract than playing the “he said, she said” game in front of a judge or jury. In addition, new regulations governing assignment of benefit (AOB) agreements require roofing contractors to reduce all AOB agreements to writing.
- Specify the scope of work. A roofing contract should be specific about the scope of work to be performed. For example, there is a big difference between “repairs” and “replacements,” and an equally significant difference between “replacing” a few shingles and “replacing” an entire roof. Roofers should always be as specific as possible about the scope of work they are agreeing to perform. Furthermore, new regulations governing AOB agreements require that roofing contractors specify the scope of work that will be performed under any AOB agreement.
- Be specific about compensation. In an ideal world, customers or general contractors would pay everything up front. Since roofers often operate under a credit relationship with another entity or person, it is important to be specific about compensation terms. Not only should roofers be specific about the dollar amount owed for work on a construction project (and the timing of such payments), but they should also be specific about what happens when they are not paid according to the contract’s terms.
- Account for the unexpected circumstances. Accounting for unexpected events can save time and money, but doing so often requires legal expertise. Some older contracts include delay provisions that attempt to account for unforeseen conditions and circumstances with overbroad language that courts may choose not to honor. Roofers with older boilerplate delay provisions should seek counsel to assess whether their “force majeure,” “Act of God,” or “no-damage-for-delay” provisions are enforceable under Florida law.
- Protect against unexpected liability. Roofers should have indemnification provisions that protect them against liability from third parties, while, at the same time, complying with the applicable Florida Statues section 725.06.
Dealing with Employees
Roofing contractors should properly document the form of their relationship with their employees and those who may perform work as independent contractors. If a roofing contractor works with independent contractors, that roofer should take note that courts look beyond the name given to the relationship between it and its workers. If a worker functions as an employee, even if they are called an independent contractor, then that worker may be treated as an employee in the eyes of the law.
A properly licensed roofing contractor may still run into trouble when operating within unfamiliar jurisdictions. Likewise, federal regulations under the U.S. Department of Labor’s Occupational Safety and Health Administration often change without much notice.
State and Local Licensing Violations
- Permitting Violations. Even though certified contractors are licensed to operate statewide, the types of projects that require local permits vary by locale. An easy way to be subject to a licensing violation is by failing to pull permits where necessary. Section 489.129(1)(o), Florida Statutes, is the governing authority to which the Department of Business and Professional Regulation (“DBPR”) cites when prosecuting permit violations. Avoiding a violation of this Statute requires certified contractors to be organized and always up to date regarding the permitting requirements in the municipalities where they perform work.
- Timely Responses to Civil Judgements. The DBPR can pursue disciplinary action against certified contractors for failing to satisfy civil judgements within a reasonable time. The statutory authorization for this comes from section 489.129(1)(q), Florida Statutes. Therefore, roofers should take all civil actions filed against them seriously.
- Allegations of Fraud and Willful Building Code Violations. Disciplinary action by local building departments can lead to discipline issued by the Construction Industry Licensing Board (“CILB”). According to section 489.113(4)(b) of the Florida Statutes, local construction regulation boards can deny, suspend, or revoke a certified contractor’s permitting privileges, if a local board finds, through the public hearing process, that a roofing contractor committed fraud or a willful building code violation. Such local disciplinary action has led the CILB to revoke contracting licenses in the past.
In addition to state and local permitting requirements, roofing contractors must also comply with federal Occupational Safety and Health Administration (OSHA) regulations and guidelines. One such requirement is to have fall protection on construction projects. Many roofers opt for a personal fall arrest system (PFAS), consisting of an anchor, a harness, and a lifeline or lanyard.
OSHA has authority to issue civil penalties for violations. The assessment of penalties for an OSHA violation is made by an OSHA area director, who bases his/her determination on four factors: (1) the gravity of the violation, (2) the size of the employer, (3) the good faith of the employer, and (4) whether the employer has a history of violations. The maximum fine for willful or repeated violations of an OSHA regulation is now over $130,000.
This final section discusses how to secure payment from a delinquent customer. If a roofing contractor performs work and is not paid in full, that roofing contractor may claim a construction lien against the delinquent customer’s real property. It should be noted that this section is no longer relevant to AOB agreements. Specifically, under current Florida law, a roofer waives his/her right to claim a lien against an assignor, after entering an AOB agreement. See section § 627.7152(7)(a) of the Florida Statutes.
While Florida Construction lien law ultimately helps ensure full payment for contractors, it is not always clear regarding the procedural requirements for perfecting lien rights. Understanding the nuances and technicalities required to perfect lien rights is critical to being paid, since the requirements of Florida’s Construction Lien Law are strictly construed. Stunkel v. Gazebo Landscaping Design, 660 So.2d 623, 625-26 (Fla.1995).
An examples of a procedural requirement for perfecting a construction claim of lien is the 90-day recording deadline, measured from “final furnishing of the labor, services, or materials by the lienor.” Section 713.08(5) of the Florida Lien Law provides in pertinent part:
The claim of lien may be recorded at any time during the progress of the work or thereafter but not later than 90 days after the final furnishing of the labor or services or materials by the lienor. . . .
Further, subsections 713.01(12) and (13) provide:
With respect to rental equipment, the term means the date that the rental equipment was last on the job site and available for use . . . or 2 business days after the lessor of the rental equipment receives a written notice from the owner or the lessee of the rental equipment to pick up the equipment, whichever occurs first.
This is just an example of the statutory lien law nuances that can make the difference between perfecting a claim of lien and recovering payment from a delinquent customer or general contractor.
In summary, this post provides some helpful tips for roofing contractors to avoid problems. It is not, however, an exhaustive list. Without proper guidance from counsel on these and other matters, roofers run numerous risks, from losing a license to not getting paid for hard work.
Carter Smith, J.D. Candidate 2019